Correlation Between Entegris and Nature Wood
Can any of the company-specific risk be diversified away by investing in both Entegris and Nature Wood at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Entegris and Nature Wood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entegris and Nature Wood Group, you can compare the effects of market volatilities on Entegris and Nature Wood and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Entegris with a short position of Nature Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entegris and Nature Wood.
Diversification Opportunities for Entegris and Nature Wood
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Entegris and Nature is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Nature Wood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature Wood Group and Entegris is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Entegris are associated (or correlated) with Nature Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature Wood Group has no effect on the direction of Entegris i.e., Entegris and Nature Wood go up and down completely randomly.
Pair Corralation between Entegris and Nature Wood
Given the investment horizon of 90 days Entegris is expected to generate 0.35 times more return on investment than Nature Wood. However, Entegris is 2.84 times less risky than Nature Wood. It trades about 0.04 of its potential returns per unit of risk. Nature Wood Group is currently generating about -0.05 per unit of risk. If you would invest 9,031 in Entegris on September 4, 2024 and sell it today you would earn a total of 1,852 from holding Entegris or generate 20.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entegris vs. Nature Wood Group
Performance |
| Timeline |
| Entegris |
| Nature Wood Group |
Entegris and Nature Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entegris and Nature Wood
The main advantage of trading using opposite Entegris and Nature Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris position performs unexpectedly, Nature Wood can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nature Wood will offset losses from the drop in Nature Wood's long position.| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
| Nature Wood vs. SmartStop Self Storage | Nature Wood vs. Asure Software | Nature Wood vs. Infosys Ltd ADR | Nature Wood vs. Apogee Therapeutics, Common |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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